You’ve found the perfect house and you’re ready to make an offer. But, you’re not really sure how to go about it. Making an attractive offer that works for both you and the seller is a balancing act, and it can be difficult to get it right. Fortunately, you’re not alone; we’ve listed 10 tips that will help your offer stand out from the crowd.
1. Have Your Paperwork in Order
A serious offer should be backed up by proof that you’re serious about purchasing the home. As the buyer, your offer will immediately be stronger if you have documentation that you’re pre-approved for financing. It’s also good to show proof of how much you’re able to put down as a down payment; offers with a larger deposit are more likely to be accepted.
2. Let Them Name Their Price
If you find yourself able to make an offer on a home that hasn’t yet been listed (a good agent can make this happen), be careful not to name your offer first. You and the seller might have very different ideas about how much the home is worth. By finding out what the seller wants, you avoid putting in an offer that’s too high and overspending – or an offer that’s too low and could be rejected outright.
3. Use Closing Costs as a Bargaining Chip
This tip leaves you a little wiggle room for negotiating a better deal. If you want to make an offer that’s lower than the asking price, offer to pay half – or even all – of the closing costs. Then, if the seller counters at the full asking price, you can choose to accept it on the condition that they’ll pay the closing costs instead. On the other hand, if they accept, you get the house at a discount for a win-win!
4. Make Multiple Offers
There’s no reason why you should stick to just one offer on the same property. Everyone likes to have options; if you provide two or three options, your offers are more likely to be noticed and responded to. When the seller sees a choice, it gives them the feeling that they’re in control.
5. Take Care with Clauses
It’s worth adding a few clauses/contingencies into your offer to protect yourself if things don’t work out as expected. A common contingency is to make the offer dependent upon obtaining financing, or the result of an inspection. However, don’t overdo it — the fewer clauses there are in the contract, the more appealing it looks to the seller.
6. Put Your Money Where Your Mouth Is
An earnest money deposit is a small, lump sum of cash from the buyer to the seller that is normally put in escrow. This is a show of good faith and proof that the buyer is serious. Typically, buyers will offer 1% to 2% in earnest money; but, to show that you’re really serious, you can always offer more. Remember, it’s not really any more money for you – whatever earnest money you pay will go toward the down payment.
7. Sweeten the Deal
Your offer can really stand out if you add in a few sweeteners for the seller. Try offering to reduce the due diligence period, which is the time reserved for inspections. Buyers are normally able to back out of their offer during this period, so a shorter time period is more attractive to the seller. Even if the buyer does pull out, the house would have been off the market for a shorter length of time.
8. Offer a Month Rent-Free
Another idea is to offer a month of occupancy to the seller. Because most mortgage payments don’t start until a month after closing, consider allowing the seller to stay rent-free in the home for one more month. This will give them more time to make their move and finalize their plans.
9. Be Flexible
Flexibility is key for those looking to stand out from the crowd. For example, if you’re able to be flexible with the closing date, you could offer a quick closing but not enforce it. Sometimes, the seller wants to close as soon as possible, while other times it would be better for them to hang on for a few weeks. Learn to understand their needs and act on them.
10. Be personal
Putting in an offer on a home can be a daunting task, but the seller is a person, too. Attach a cover letter to your offer that describes why you love their home, and how you think it would be a great fit for your family. You never know; you might tug at their heartstrings!